GC Intelligence (London) — The relentless Polyphenylene Sulfide (PPS) price climb seen in the past months appears to have run out of steam at the start of the year. The latest price increases for 1H2019 business are much lower than the ones posted in the last round of negotiations, namely for 2H2018. The considerable slowdown in economic activity, which has hit an already troubled automotive sector, caused a decrease in demand. A slowdown in demand produced lower than expected price increases of €100/mt for all grades. This is almost a sideways movement when compared to the price hikes in 2018 of €500/mt and above. At the same time, prices did not decrease because market fundamentals remain structurally tight. Producers at the end of 2018 anticipated better market conditions at the start of 2019 and had announced price hikes. For example, a major seller in a note issued at the end of 2018 stated its intentions to increase PPS prices in Europe from 1 January 2019 by €700/mt. PPS prices are still expected to remain supported in 2019, but the anticipated lower economic growth will likely cap the upside.
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